When we have money management problems,one of the first places people think of turning is the local financial services provider. These are the banks, financial planners and advisers, accountants, insurance agents and similar professions. The thought is that these people work in the financial services field so by default, they’re good with money. The truth is, however, that just because someone works in a particular industry doesn’t mean they’re giving good advice.
I’ve met more than a few bankers that have too much debt. I’ve met financial planners who give budgeting advice to their clients, yet they can’t pay their own bills. No doubt in my mind they’re good at picking good investments, but that doesn’t mean they handle money well.
You shouldn’t be afraid to ask your coach or adviser what they do with their money. If they’re telling you to purchase a specific product, I would think they should own the same product. How unprofessional is it to not practice what you preach? You shouldn’t be afraid to ask your coach or adviser why they recommend you take a certain action with your money. Never buy something that you don’t understand. If you don’t know how an investment works, you need to stay away until you’re comfortable enough with it that you can explain it to someone else.
You’ll never hear me talk about how to use your credit cards wisely to get out of debt. That’s like telling an alcoholic to drink responsibly in order to sober up. Yet so many personal finance sites and “experts” tell you one minute to get out of debt, then turn around and give you advice on which credit cards offer the best rewards. That doesn’t make sense to me.
I don’t want to give all financial professionals a bad name here. There are plenty of financial service providers out there that are giving good advice. I just want you to be careful to not make assumptions when seeking financial advice. Don’t assume someone is giving good financial advice just because of their title or academic credentials. Do the due diligence and ask the right questions. We’re talking about your financial future here. It’s ok to interview as if you’re the boss hiring them for a job because, quite frankly, you are.